What the Boeing Company Teaches about Right to Work

Yet right-to-work opponents continue to trumpet the tired old line that giving workers a choice on whether to join a union or not hurts the economy. The AFL-CIO maintains that right to work laws “hurt economies and don’t create jobs.” New Hampshire Governor John Lynch (D) recently vetoed a right-to-work bill passed by the state’s legislature saying, “There is no evidence that this legislation will offer any benefits to New Hampshire's economy or workers.”

Someone should tell that to the South Carolinian workers recently hired for well-paying jobs by Boeing thanks to the business friendly environment their state. Yet union leaders seem less concerned with job creation than with institutional self-preservation.

In states that do not have right-to-work protections, unions can require employees to pay dues as a condition of employment. Unions like this compulsory arrangement because it allows them to easily expand their membership, income, and power, without having to sell themselves. This monopoly makes unions less responsive to their members.

In right-to-work states, unions must demonstrate to workers that their service has value or they will refuse to join. As in other areas of the economy, competition makes providers of goods and services—in this case the representation services of labor organizations—more efficient and responsive.

Competition also extends across geographical boundaries, as the shifts in population of recent decades show. Workers and business are voting with their feet. Since 1970, the population in right to work states has more than doubled, while only increasing 25.7 percent in forced unionization states. This substantial gap in population growth is likely attributable to people moving from forced unionization states to right-to-work states because of better job opportunities arising from right-to-work states’ better business environments.

Michigan, where forced unionism is a way of life, is the only state in the nation to have lost population over the past decade, with the City of Detroit by itself losing 25 percent of its residents. Ironically, the economic stagnation that forced unionism policies beget can even hurt unions in the long run, as Michigan’s plight shows. In 1989, 26 percent of Michigan’s workers were unionized. Today, that number is 16.5 percent—and that from a smaller labor pool.

Where are all the jobs going? Senator Lamar Alexander (R-Tenn.) answered that question in a recent GOP weekly address: “After 25 years, non-union Nissan operated the most efficient auto plant in North America.” The Senator continued, saying, “Nissan’s success is one reason Volkswagen last week opened its North American manufacturing plant in Chattanooga and why Honda and Toyota, BMW, Kia Mercedes-Bens, Hyundai and thousands of suppliers have chosen South-Eastern, right-to-work states for their plants.”

Currently, policy makers in three states—Michigan, Maine, and New Hampshire—are considering enacting right-to-work laws. As they ponder their options, they should look at where the jobs are. Workers want more jobs, faster income growth, better job security, and freedom of association—these are all things that right-to-work laws can help achieve.

F. Vincent Vernuccio is Labor Policy Counsel at the Competitive Enterprise Institute (CEI) Adam Michel is a research associate at CEI.